Forex crisis now threatens macroeconomic stability
Like all countries in the world, Bangladesh too is facing volatility in the foreign exchange market. This was initially caused by the demand recovery and supply chain disruption as battered economies began recovering from the coronavirus pandemic. The volatility has exacerbated in the last one month because of Russia’s invasion of Ukraine and this is not only threatening to derail the rebound from the health crisis but also bringing about a bigger macroeconomic challenge for Bangladesh. Maintaining a stable exchange rate of the taka against the US dollar is a populist idea that prevailed in the mindset of both the government and commoners. The same thinking might still be dominating although the country seems to be facing a far bigger crisis than the pandemic. Between July and January, imports stood at $46.67 billion, up 46 per cent year-on-year, while exports increased 29 per cent to $27.97 billion, central bank data showed. Remittance declined 19.4 per cent to $16.68 billion at the same time. The exchange rate now stands at Tk 86.20 per US dollar compared to Tk 84.80 a year ago. This means the central bank has allowed the taka to depreciate in a certain range. Higher imports against moderate exports brought down Bangladesh’s foreign exchange reserves to $44.29 billion on March 23. This is way down from the $48 billion recorded in August last year.
Edible oil prices have declined
Domestic edible oil prices have declined as refiners reduced their rates after the government drastically cut the value added tax (VAT) on the key cooking ingredient in a bid to ease the pressure on consumers who are being battered by rising food inflation. The price of loose palm oil, the most widely used type of edible oil, has fallen by as much as 12 per cent to Tk 131-136 per litre in Dhaka city, where the same amount would cost Tk 150-155 a week ago, according to data on market prices compiled by the Trading Corporation of Bangladesh (TCB). The NBR initially removed the 15 per cent VAT, a kind of consumption tax paid by consumers, at the production stage and 5 per cent at the trading stage. The government reduced the price of soybean oil by up to 5 per cent on March 20 after a meeting with edible oil refiners. Processors later cut prices of loose palm oil as well.
SME Foundation seeks Tk300cr for women entrepreneurs
After the successful implementation of the stimulus package, this time the SME Foundation has asked for a fund of Tk300 crore to help women entrepreneurs shake off the Covid-19 pandemic blues. Tk200 crore has been sought for Covid-walloped women entrepreneurs in rural areas and an allocation of Tk100 crore for the formation of Women Entrepreneurship Development Fund in light of the National SME Policy-2019. Some 3108 entrepreneurs, mostly small and medium entrepreneurs from marginal areas, received the loan. Of the entrepreneurs, 23.70% were women.
Local and Global Stock Indices *
|Index Name||Close Value||Value Change||Percentage Change|
|↑ 153.30||↑ 0.44 %|
|FTSE100||$ 7,483.35||↑ 15.97 ||↑ 0.21 %|
|Nikkei 225||$ 28,149.84||↑ 39.45||↑ 0.14 %|
World Commodities *
|Commodity||Close Value||Value Change||Percentage Change|
|Crude Oil (WTI)||$ 113.90||↑ 1.56||↑ 1.39 %|
|Crude Oil (Brent)||$ 120.65||↑ 1.62||↑ 1.36 %|
|Gold Spot||$ 1,958.29||↑ 0.60||↑ 0.03 %|
Major Currencies Exchange Rates Movement in Last Seven Days *
|USD 1||BDT 86.2000|
|GBP 1||BDT 113.8443|
|EUR 1||BDT 94.8717|
*World Commodities & Local and Global Stock Indices data are taken from bloomberg.com<
* Exchange Rates are taken from BB website, as on latest update.<